Solid foundation for bounce back

by Phil Bartsch

3rd Apr 2020 9:51 AM
premium_icon
Subscriber only

THE strong fundamentals of Queensland's commercial property sector, and billions of dollars in infrastructure projects already underway, will provide a solid foundation for the market to bounce back from the coronavirus crisis.

According to Colliers International's Queensland chief executive Simon Beirne, there are positive signs for the state's property industry "on the other side of all this".

"We've come out of what was a pretty good market until a few weeks ago," he said.

"But no one's really got a crystal ball and it's still early days.

"Clearly the economy is going to be affected but the flow-on to commercial property is still an unknown quantity at this point on the timeline."

Nevertheless, Mr Beirne said a number of key fundamentals indicated the sector was in a strong position leading up to the lockdown restrictions being put in place to combat the spread of the coronavirus.

He pointed to the latest Australian Demographics Statistics released recently by the Australian Bureau of Statistics that show Queensland's population grew by 1.7 per cent to 5,115,451 residents in the 12 months to September last year.

Colliers International Queensland chief executive Simon Beirne.

Mr Beirne said the growth had prompted a massive infrastructure spend that would "help spur economic growth" beyond the current situation.

"Currently there are about $26 billion worth of infrastructure projects under construction in southeast Queensland, some of which may be experiencing delays due to supply chain issues," he said.

"But in due course they may be fast tracked as a strategy to reactivate the economy.

"Brisbane City Council has announced up to 48 projects may be fast tracked, which still need government approval.

"Given that governments are likely to inject significant fiscal stimulus into all sectors of the economy once the shutdown conditions are lifted, this is a continuing positive for the economy.

"Major construction sites across Queensland are currently still operating, maintaining the projects relatively on track, which will help spur economic growth on the other side."

But Mr Beirne said the impact on the state's commercial property sector would depend on how long the situation lasted.

"Firstly, you've got the health crisis, which involves the spread of the virus and getting on top of that,' he said. "Hopefully, we should get through that this year.

"Then, running parallel with that, you've got the economic impact obviously extending beyond that but it might be shorter, sharper and not be as long as what people are forecasting.

"Once things get restarted - and nobody knows when that is going to happen - that should provide an immediate kickstart for demand.

"Also, the Federal Government appears to be very motivated with the stimulus package they've provided to date so that should no doubt soften the blow."